The general situation of the company is mainly engaged in the R & D, production and sales of proprietary Chinese medicine and chemical preparations. The actual control of the company is Xu Danqing, which holds 31.05 million shares, accounting for 31.05% of the post-issue share capital, and the Xu family holds a total of 67.5% of the total share capital after the issue.
The company's revenue continued to grow from 2009 to 2013, rising from 200 million to 340 million, with a compound annual growth rate of more than 14%, but the growth rate tends to slow. The growth rate of the company's net profit exceeded revenue, rising from 24 million in 2009 to more than 80 million in 2013, with a compound annual growth rate of more than 35%. The growth rate also tends to slow. The company's overall gross profit margin rose from 25% in 2009 to 43% in 2013; net profit margin rose from 12% in 2009 to 24% in 2013. The composition of the products sold by the company has undergone certain changes in recent years, the proportion of sales of anti-infective drugs has decreased year by year, while the proportion of cough and expectorant and kidney-tonifying products has increased year by year.
The company's main product analysis company's product Zhike Bao is a national second-class protected variety of traditional Chinese medicine, and the secret recipe of the product has been selected into the cultural protection heritage of Lingnan traditional Chinese medicine. At present, only Hainan Haili and the company produce it. A better competition pattern is of great significance for maintaining product prices. At present, Jinkui Shenqi tablet is only produced by the company and Kunming traditional Chinese Medicine Factory, and the company has a relatively dominant position in the retail market, and the competition pattern is good. The company has erythromycin enteric-coated tablets and relying on erythromycin tablets these two macrolide products, considering the market competition, we think that these two products may grow slowly. The company's product, nystatin, is an antifungal drug, and foreign-funded enterprises in this field have absolute advantages. At present, the market share of nystatin is small, and we expect sales to remain stable in the future.
The company intends to issue 25 million shares, with a total share capital of 100 million shares after the issue. The offering price is 14 yuan, raising a total of 350 million yuan.
Investment suggestions We believe that proprietary Chinese medicine products have fewer competitors and may maintain the rising share of sales in the future. The competition in the field of western medicine is relatively fierce, and the company's products are facing greater competitive pressure. We predict that the EPS in 2014 will be RMB 0.85. taking into account that it is more appropriate to give a price of 25 times PE, the corresponding share price is RMB 21.25. on this basis, it fluctuates by 10%. We think the reasonable price range is RMB19.13-23.38RMB.
The risk indicates the risk of the change of medical policy, the decline risk of the main business, and the risk aggravated by market competition.